BetTrader Pro Betfair Software Blog

The advantages of short term trading

The secret of successful trading on UK horseracing favourites in the final minutes before the off is simple: the less time you hold a position the better. When making trading decisions based on nothing more than the most recent price pattern you have to accept that things can turn against you instantly. As there is no way of knowing which trade is going to be the bad one then you have to enter each new trade with the assumption that it is going to be the one that gets you. Therefore it logically follows that if the trade that you have just opened is going to lose money then you should get out of it as fast as you can! The quicker you make yourself flat and get out of danger the better.

What do we call a short term position? You may think that a minute is not a long time to hold a position but a lot can go wrong in a minute. If you were to hold the same position for 30 seconds then you instantly halve your risk, but you are still sitting there like a sitting duck for a full half a minute. As you are not aware of everything that is going on in the market you are exposing yourself to factors over which you have no control or even knowledge. To make money consistently you cannot be putting yourself in that position because you cannot consistently predict such a complex series of events as can happen in half a minute or a minute without getting your fair share wrong. If you’re taking small one and two tick profits but taking large 4 or 5 tick losses when the price goes against you then you’re going to lose money.

You must only trade when you are as sure as you can possibly be of what is going to happen, and the longer you’re in it, the more factors can come into play against you. Forget about how much money you are going to make if you are right, your chance of getting out unscathed is inversely proportional to the amount of time that you are at risk: the longer you’re in it the more that can go wrong. Trading is all about damage limitation, and if you can survive each trade while making the occasional profit here and there then you are succeeding. The overriding emotions of successful trading should be fear and anxiety coupled with a general feeling that you’re getting nowhere fast whilst wishing that you didn’t have to put up with this shit to make a few quid. Survival is the name of the game and every trade that you get out of without losing is a success, and the best way to make sure a trade doesn’t cost you money is to get out of it immediately. By immediately I mean within 5 or 10 seconds, every extra second you’re exposed is increasing your chances of the price turning against you. Your chance of a profit may also be increasing but you should only have entered the trade with the certainty that it was going to be an instant winner, if you are now holding a position for a different reason than your first reason then all you’re doing is gambling. The most clueless gambler in the world can put money on red and make money when red comes in; making money by holding onto a trade until it comes right doesn’t mean you did the right thing. If you can’t get out of your trade with an instant small profit then you should get out immediately at the same price that you got in at, a Scratch trade. If you can make a single tick profit on 30% of your trades and break even on the rest of your trades you will make money by getting it right less than half of the time on an up or down chance. And by reducing the amount of time that you hold a position to the absolute minimum as well as reducing your profit goal to the absolute minimum you are boiling each trade down to as close to a coin flip as possible because within such constricting conditions the price can only do 1 of 3 things before it is liquidated: go up, go down or stay the same. If you are using the bid and offer to your advantage and asking for good prices then you can either make a small profit or break even no matter which one of the 3 outcomes happens.

The short term trader is an operator, a mathematical grinder capable of making consistent profits from buying and selling something intelligently. The simple reason for this is that they spend such a small amount of time actually exposed to the market whilst at the same time watching every slightest market move with an eye for a quick profit. A trader’s biggest advantage is being able to choose when to be invested and when to hold back, and an ultra short term trader will be open to every opportunity whilst also being unexposed to any risk at all for over 99% of the time that he is watching the market.

Short term trading is a volume game: as your profit only equates to a fraction of a percent on turnover you have to do as much volume as you can to make it worthwhile. For instance, you can see that my percentage profit return on turnover in 2003, 2004 and 2005 from scalping the Betfair horseracing markets was less than a quarter of one percent. Many people would not bother with such a small return and would be tempted away by the relatively huge payouts (and losses) of guessing which horse will win the race. But by doing a turnover of over GBP50 Million worth of bets during that time using a trading bank of only GBP3000 I made that quarter of a percent worth having. A quarter of a percent of GBP50 million is over GBP100,000 profit without ever having a losing week and at one point going 11 months without a losing day. And I was only able to do such a large volume of bets because by taking such small profits and doing lots of scratch trades and getting out of all positions quickly I was free to churn my bank over and over again. A losing trade of several ticks not only takes all of the profits from several profitable trades but more importantly it robs you of turnover also. All the time that you are sitting on a losing trade doing nothing more than hoping and praying that it will come back is lost time where you could be turning over more money, scratching and taking single tick profits.

That's right folks, you can use certain features of this popular Betfair trading software completely free of charge if you want. And for as long as you want to, it's not a free trial or a limited offer. Here's how:

You are charged minutes whenever you are viewing an open Betfair market in the main display window of the application. To get around this you can make the bet pop up box appear by clicking on any price box on the grid interface, and then you select the Homepage of the application to view in the main display window.

Viewing the homepage of the app is not an open Betfair market so you are not being charged minutes. However, the bet pop up box that you just opened for that market is still open and minimised at the bottom of the screen and from that you can view live prices, live graphs, access all the Trading Tools and submit bets. Simple. You can make your Free Trial last forever!

And you can view this bet pop up box while looking at any other website page, Betfair.com for instance. Or oddschecker or you can have the live prices showing in the corner of the screen while you watch betfair's live pictures. Marvellous.

Visit Racing Traders Site and Blog

I had a bit of a demo video bonanza and the Demo Videos page of the website now has 23 demos explaining the different features of BetTrader PRO, 4 demos of soccer games that I traded on in the World Cup and 4 demos of me trading on the horses. The latest horse trading video I made today has live commentary as I place the bets.

Watch the Videos on the Blog

Here's a new video I made yesterday showing how I trade on UK horseraces in the last minutes before the start of the race. It's 35 minutes long and shows me trading on 7 different races with commentary that I added later to explain what I was doing and why. You can see how much faster I'm able to trade by using BetTrader instead of the Betfair website interface, entering Back or Lay trades at any price with only one click of the mouse.

Go to Racing Traders Blog and watch the video

We're happy to announce the release of version 2.13 of BetTrader PRO. This version is a major breakthrough as we have been working tirelessly to fix the freezing and slowdown problems that some users were experiencing and we've succeeded! It is super stable and super fast!

We're so confident in this latest build that we've given all of our past users another free trial. If you have already used your free trial up, or if your account with us is no longer active then simply log in to BetTrader again and you will see that we have given you 200 free minutes so you can test it out for yourself. When you log in you'll be prompted to download the latest version and your account will be instantly activated, you don't need to do anything. If you have never used BetTrader before then simply Download it for free and log in with your Betfair username and password, the application will work immediately.

Aswell as being ultra stable and ultra fast, this latest version is also ultra secure. Each time you log in to BetTrader PRO your Betfair username and password is encrypted by our Thawte SSL Certificate with 128 bit technology before it is sent over the internet to Betfair's servers. You can view our valid SSL Certificate on the Buy Now page of our website which also uses the SSL certificate to encrypt your Betfair username before sending it over the internet.

1. Predicting and trading in different timescales

You must make sure that you match the timescale of your prediction of the price’s direction with the amount of time that you hold your position. For instance, a classic mistake would be if you are trading the favourite’s price 3 minutes before the race is due to start and you see that the price is being Backed heavily and is going down. You think that this horse has a really good chance of winning the race so you decide to Back also. WRONG!!! If you do that you are basing a short term trading decision on a long term view of the price. The timescale of your prediction of the price, i.e that the price will go down because the horse will win the race, is different from the intended timescale of your trade, which is to trade out of it with a profit in a minute or less. Unless you’re going to hold the bet until the race has finished then you can’t base trading decisions on where you think the price will be when the race has finished.

2. Not getting out instantly

Short term traders don’t realize just how short term you have to be to avoid the losses. To trade without knowing anything about what is going on, you have to assume that any movement against you is going to carry on going against you in the most painful way it can. And this isn’t to drastic of an assumption, as anyone that’s held onto a losing trade only to see it get worse and worse will agree. Without any knowledge to the contrary you have to assume the worst, and the only protection against this is not to be in harm’s way: The less time you’re in a position, the less can go wrong. Take your profits quickly and your scratch trades and losses even quicker. By quickly I mean instantly, profit scratch or loss you should be out, or at least have your counter trade in, within 10 or 20 seconds at the most.

Get your Free 200 Minutes of the Software!

3. Not doing scratch trades

There is a tendency amongst new traders to see the scratch trade as a waste of time. The scratch trade is where you lay and back the horse at the same price. Once someone has done a scratch trade, only to then see the price go 2 or 3 ticks the right way they tend to stop doing them. The new trader can’t get it out of his mind that the scratch trade just cost him a profit and stops doing them. However, human nature, some more than others, will always make us dwell on what we just missed out on without appreciating what we’ve got. A scratch trade that gets you out of the market before the price suddenly turns against you is soon forgotten about as the trader quietly congratulates his trading skills and quickly forgets all about it. A missed profit has a different effect on many people than a saved loss of the same size has. The fewer scratch trades you do the more losses you will have, that is a fact, so therefore you need more profits just to get back the extra that you’re losing. It’s far better to not lose and then to not win than it is to lose and then win.

4. Letting losing trades ride as bets

To be a successful trader you must be taking profits and losses of roughly the same size, but having more profits than losses, the scratch trade taking the place of the losses. As soon as you start to let your losses get bigger than your profits you’re creating an uphill battle for yourself because then you have to have lots more profits than losses just to break even. The absolute worst thing you can do is hold on to a bet because you were losing on it and let it ride as the race runs. Doing this is total insanity from a risk reward ratio and is gambling at it’s worst. If you want to gamble then gamble but at least do it properly. Don’t do a hybrid mix of trading and gambling where you’re doing each one badly. To make small one and two tick profits and then risk your whole bank on the outcome of a horserace because you couldn’t take a small one or two tick loss is stupid. You know that in the long run it’s going to end in tears so why do it? There’s no point in winning 9 times and losing once if your loss is 50 times the size of your profit. Anyone with such a complete lack of discipline not only will lose but deserves to lose.

5. Reading form and watching racing

As a short term scalper the last things you want to do is read form and watch the racing on television. Those that wish to gamble on the outcome of the races should of course do these things but a trader should avoid the formbook and the television. Not only are they distractions from trading but they implant biases in the trader’s mind that detract from his ability to concentrate solely on the numbers and the patterns of movement that they are creating, leading to scenario 1. The scalper shouldn’t read the racing paper or switch on the television and should only log in to Betfair at the most 20 minutes before the first race.

6. Wanting to enjoy the racing

Trading is often described as boring and detracting from the enjoyment of racing. This may be the case but horseracing is of no concern to the scalper so this comment is meaningless. Horseracing has nothing to do with what the scalper is doing. Wanting to enjoy the racing or enjoy your betting is fine but you cannot trade successfully at the same time. You can do one or the other but not both. Trading requires concentration and dedication and if you’re watching horseracing at the same time then you are being unprofessional.

7. Over thinking their trades

Most traders over think which way the market is going to go which has 2 drawbacks: firstly, they don’t do enough trades which cuts down their potential to make money and secondly when they do eventually pull the trigger they have put so much thought and effort into their trade that they fall in love with it. They are unwilling to get out of such a trade with an almost instant scratch trade or an almost instant small loss. It’s as if doing that would be to embarrassing after waiting so long and putting so much time into it. This is why people ride their losses due to their inability to accept so quickly that they were wrong. Instead of entering into a trade with the confidence that you are right, each trade should instead be entered with the assumption that you are wrong with a willingness to react correctly if indeed you are wrong. As much as you may have built up your reasoning for the trade you just did, you must remember that you don’t actually know anything about what is going on and it’s ok to be wrong.

8. They don’t use BetTrader PRO

Not using BetTrader PRO when scalping is by far the biggest mistake anyone could make! It’s the only Betfair trading software that was designed and built by a full time UK horseracing prices scalper, namely me! They say necessity is the mother of invention and that’s definitely the case with BetTrader. Having live price feeds and one click bet submission at any price, lay or back, gives the trader the absolute flexibility he needs to turn on a sixpence which the Betfair website and other trading applications don’t let you do. When traders use the competition they start thinking their gimmicky little weight of money indicator is actually going to tell them which way the market is going to go. After putting their faith in that or in some equally crap graph they fall in love with the bet like in point 6 and don’t react the way they should when it goes wrong. Until my competitors do a demo video with higher stakes than 2 pounds, or show us one of their top trader’s Betfair results for any period of time where they make more than tuppence ha’penny they can kiss my arse. Watch my Demo Videos

9. Get distracted during races

It’s easy to get distracted by lots of different things when you’re trading but you must ignore everything. Don’t check your emails, don’t be on instant messenger and don’t go on the Betfair forum while the racing is on. To really get in the groove you have to concentrate on every race, moving onto the next race when that one is due to start. That slack period where you have just greened up on a race and then move onto the next race and there is still 10 minutes to go and everything is quite calm shouldn’t be used to do other things. That’s the time where you can sit back for a few minutes while nothing much is happening and relax a bit, but you must still watch the price and be aware of what is happening. Don’t take your eyes from the screen except to go for a piss. If you smoke then smoke in front of the computer or not at all, nipping out for a cigarette will cost you thousands of pounds over the course of a year. And don’t completely leave the moment by chatting online to others, don’t even answer the phone or check out other websites. Concentrate dammit! For 3 and a half hours you are a trader and nothing else, you’ll be surprised how much better you trade when you don’t allow any outside distractions of any kind, letting yourself be absorbed by what you are doing and really seeing the movements and imagining what they might do next.

10. Wanting a profit of predetermined size

Many people decide how much they want to make out of a trade before they enter it and then set their exit price according to that rather than what it looks like they can reasonably get now. Wanting to make 2 ticks is great but putting your countertrade in 2 ticks higher than you just layed at and then sitting back waiting is gambling, not trading. It might go up, but it might go down, if you can’t get out straight away with a profit you should ask for a smaller profit. If you can’t get the smaller profit straight away you should scratch, and if you miss the scratch trade you should take a loss. If instead of all that you remain motionless with your countertrade still in at the same price waiting for your 2 tick profit then you are gambling and will have your share of profits but also your share of big losses.